Publication year

The Cyprus bailout program presented on Monday 25 March is much better than the proposal presented a week before. A Cypriot euro exit has been averted, but the country will face a difficult and uncertain economic future.

The world has entered calmer waters since the beginning of this year. As such, some are already claiming that they are ‘seeing the light at the end of the tunnel’. We caution that there may still be some tunnel ahead.

UK’s recovery is still very sluggish while the labour market is going from strength to strength. The economic outlook is unlikely to improve materially unless the pace of fiscal consolidation is slowed.

For the Brazilian economy, 2012 has been a very disappointing year, as GDP growth fell to 0.9%. So far, the recovery of the Brazilian economy has been weak, but in recent months some positive developments became visible.

India's Central Statistical Office government is now expecting GDP growth in Financial Year 2012/13 to come in at only 5% y-o-y. We expect the economy to recover somewhat this year. Economic growth is thus likely to strengthen to 6-6.5%.

Preliminary data shows that the Russian economy grew by 3.4% y-o-y in 2012. However, this masks the fact that the economy slowed fairly sharply over the course of the year. We expect growth to remain subdued at 3% in 2013.

The actions we see when a fire erupts in a building are not unlike those observed during the eurozone crisis. The lesson here is that the eurozone must always have an economic fire department in combination with stronger institutions.

The picture in emerging markets is one of moving forward, but not knowing at what pace or how many bumps there are in the road. We maintain the view that 2013 should be slightly better than 2012, but downside risks remain.

GDP contracted in the fourth quarter amid a downturn in foreign demand. We expect a recovery in the first quarter, whereby domestic demand turns into a major growth driver in 2013. This is supported by the recent increase in the sentiment indicators.

In 12Q4 GDP shrank for the sixth consecutive quarter. Uncertainty about the policy of the next government has led to increased yields on both government bonds. It may also weaken the fragile consumer and producer sentiment.